CU Replacing Financial Officer : Restructuring: Robert J. Vecci’s resignation completes a management shake-up but is said to be unrelated to a revision of third-quarter losses.
Continuing its management shake-up, CU Bancorp said Robert J. Vecci resigned in mid-November as chief financial officer of CU and its principal unit, California United Bank. The company said Pat Hartman will succeed Vecci, pending approval from federal regulators.
Vecci left the same week that CU announced a dramatic revision of its third-quarter earnings. In its revised figures, the bank reported that it actually lost $296,600 in the quarter, rather than the profit of $135,800 it originally stated a month earlier.
Vecci’s departure follows the abrupt resignation in June of CU’s former chief executive officer, John J. Keating, who hired Vecci in 1988.
Stephen G. Carpenter, who replaced Keating as CU’s president and chief executive officer, denied that Vecci’s departure was related to the earnings revision, which was necessitated by a sharp increase in loan-loss provisions.
“I was just looking for someone different,” Carpenter said in an interview. “We needed different talents.”
Vecci, 34, could not be reached for comment. Hartman, 48, came to CU after 13 years as chief financial officer of Community Bank in Pasedena, according to Carpenter.
Carpenter said the appointment of Hartman completed “the last piece” of CU’s management restructuring that began early this year with the naming of a new chairman, Melvin Gagerman. That move was followed by several other key executive changes in reaction to the company’s financial troubles.
Like other California banks, CU has been plagued by loan losses because of the state’s weak economy and real estate market. The company, which has assets of $462 million, lost $3.2 million through the nine months ended Sept. 30, compared with a loss of $4.9 million for the similar period a year earlier.
In June, CU entered into a formal agreement with the Office of the Comptroller of Currency, the bank’s primary federal regulator, which required CU to adopt a written program to reduce risky assets and maintain adequate loan loss reserves, among other steps.
Indeed, bank analysts said CU’s unusual revision of third-quarter earnings--caused by a doubling of loan-loss provisions to $745,000--was made so the bank would be in line with its agreement with regulators. Carpenter acknowledged that bank officers had conversations with regulators about the third-quarter results but said the change was not prompted by them.
Carpenter said that after the quarter ended, the bank discovered new information about two loans that “was so close to the quarter that we believed we should restate our earnings.” Carpenter declined to comment on those two loans, except to say that one was a real estate loan.
